Who leads the recovery? America or the BRICs?
Monday, February 16, 2009 at 2:31AM WORLD ECONOMIC CRISIS: "Global Search for Growth Will Turn to U.S.: World-Wide Government Outlays May Curb Downturn, but Consumers Are Key; China Damps Hopes," by Joellen Perry and Shen Hong, Wall Street Journal, 28 January 2009.
COMMENT: "Why it would be wrong to write off the Brics," by Jim O'Neill, Financial Times, 6 January 2009.
Decoupling doesn't work in either direction, so it seems. America tanks and so does everyone else. Our risky experiments in derivatives are suitably blamed. Calls are made for a global SEC-type power.
Now we see more and more thinking that the world can't restart until the American consumer does so. Some scattered evidence that the retail collapse here in the U.S. may be turning in places, but those bit and pieces might be mirages.
America provides (to the best of my amassed statistics) roughly one-half of the Core's stimulant package, but China slated to provide about 30% on its own, with the rest of the world supplying about 20% (Europe, Japan, sundry others). So Ferguson's "Chimerica" is pulling most of the load.
But those percentages tell you something about likely demand recovery: there's America and there's everybody else combined.
And yet, without the BRICs, there is no global growth right now. Industrialized countries are expected to go into the red this year, as is the Euro Zone, as is the US. Japan might grow a hair. China, Brazil and India all come down several notches, but still stand several notches above the Old Core.
Rising great powers, established great powers, many great powers.
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